The major European retailers are operating massive investments in Romania betting on consumers' rising purchasing power. Companies seem to be fighting on two levels: for the best city locations and for the largest flow of loyal customers.
Last year, hypermarkets were the "stars" of food retail. Besides the record expansion pace, with 30 new outlets having been launched, Auchan's entry among the top 10 biggest retailers in terms of sales, a year after it entered the Romanian market, also stands proof of this. However, Auchan is lagging behind Real, Carrefour and Kaufland in terms of expansion.
The development of the commercial segment of the real estate market also paved the way for a rising number of large stores, with most retailers preferring to work with developers rather than tap into real estate on their own.
Hypermarkets in 2007 were among the most dynamic employers on the Romanian market, creating around 10,000 jobs for the units opened during the October 2006-October 2007 period.
International retail groups created the segment of discount stores in Romania, with the first such units launched in 2000. In the past two years, discount networks have stepped up their expansion, doubling their number of stores each year. Thus, in late 2007, German and French discounters reached 156 stores domestically, through 100m-euro cumulated investments.
The rest of modern retail formats, supermarkets and cash & carry stores, were less dynamic in expanding on the market. The most important move on the supermarket segment last year was the acquisition of Artima by Carrefour French company for 55m euros.
2007 was the year when investment funds exited food retail, but the entrance of other funds on this market is not ruled out. An opportunity for them would be to acquire Romanian store networks, bring them to the standards of international retailers and then sell them for a profit.
However, on a market where competition is getting fiercer every day, the owners of the biggest Romanian food networks do not seem to be rushing to sell. On the other hand, large networks anticipate the disappearance of small players from the market and the concentration of modern food retail in the hands of the biggest companies in the next three to four years.
On the cash & carry segment, things seem to be already clear, with two German networks that practically created and developed this segment, Selgros and Metro.
According to a survey by PMR market research company, retail sales in Romania, including traditional stores, markets and modern retail networks, could increase by 16.5% from 2007, to 121.7bn RON (38bn euros).
Last year, Romanian retail rose by 17.8%. The sector may reach 134bn euros on long term, according to Alain Thys, managing partner with Future Lab consultancy.
Romanian retail
Retail sales in Romania, including traditional stores, markets and modern retail networks, could rise by 16.5% from 2007, to 121.7bn RON (38bn euros), with half of this sum being generated by food products
In 2007, Romanian retail posted a growth rate of 17.8%, to 104.4bn RON (31.3bn euros)
Romanian retail could reach 134bn euros on long term, when the Romanian markets gets close to the development level of Western Europe
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